That's the kind of non-denial denial you'd expect from a company that is the subject of so many non-story stories.

Todd Bishop, on his Seattle Intelligencer blog, gets Robbie Bach at Microsoft to comment on that non-denial denial, and ends up getting an explanation of why the non-denial denial exists:

"The problem is, I can't comment one way or another on any of these rumors. Because then, every time you ask me a question about a rumor, I have to comment definitively, and there's times when I don't want to, and times when I do want to. I just don't. You should interpret it that way. You should interpret it as a neutral 'don't.' "

All in all, it seems very likely that people in Bungie might want to, you know, work on a game that isn't Halo, or isn't a shooter, or, God forbid, isn't a Halo shooter. Farming out Halo Wars to Ensemble and Halo Chronicles to Wingnut seemed to me like Microsoft setting up the Halo franchise to continue while Bungie moved on to other things; but perhaps it was just a move to try and maximize the revenue from the Halo property by developing ancillary products with a series of Halo shooters at the center, developed by Bungie.

Other than that, the exact terms of Bungie's purchase were never made widely known, and when the fan community expressed doubts about Bungie's ability to maintain its independent spirit in the face of Microsoft's ownership, assurances were given that the deal allowed for this. Certainly Microsoft appears to have been hands-off in all respects except one: release dates.

Where, in all of this, is the fact that Bungie founder Jason Jones is not the official studio head and was not credited as the project lead for Halo 3? It's been said he's not a fan of sequels, and certainly this is the first trilogy in Bungie history that's actually been completed by them and not a third party. Perhaps, if the last three levels of Halo 2 had not been cut, the story would have ended there. That might explain some of the complaints that Halo 3 is short. Has Jones already been working on another IP? Does he want to, but Microsoft wants a Halo 4 developed by Bungie out in three years? Did Jones request no specific credit other than "Special Thanks" for Halo 3 because he wasn't that involved? Or because he doesn't want to be seen as being that involved?

It seems very possible, perhaps even plausible, that there is nothing in this rumor at all. If there is anything, perhaps it's only the tiniest kernel of truth: that according to the terms of the buyout, Bungie gets to decide what they develop, and they don't want to do another Halo game next. Maybe someone at Microsoft disagrees, and this rumor has sprung out of speculation over the fallout from that disagreement.